Bitcoin Breaks Through $8,000 Following Massive Head Fake

Bitcoin Breaks Through $8,000 Following Massive Head Fake

Bitcoin just surmounted the $8,000 level, topping out at $8,020 on Bitfinex before retreating to $7,900 at press time. By now, reading about Bitcoin’s breach of its previous high might be getting repetitious, so strong has the currency’s bull run been. This time is an exception, though, because Bitcoin just pulled the mother of all head fakes.

Looking back

 

About a week ago,  the SegWit2x hard fork was cancelled and the price immediately spiked from $7,200 to $7,800. But within the hour, the price had dropped and continued to fall further. Just a few days later, Bitcoin had sunk to a local low of $5,500, while rival  Bitcoin Cash shot up from $600 to $2,600. At the time, a large number of Bitcoin miners had moved to Bitcoin Cash and the number of  unconfirmed transactions soared to over 135,000. Fees increased commensurately.

 

Things didn’t look good. Bitcoin had just officially eschewed the only near-term solution to the scalability crisis. SegWit, which was adopted back in August, will take time to gain traction as wallet providers must include the feature and users must voluntarily begin using it.  Lightning Network, Bitcoin’s long-term scaling plan, is still in testing and not ready for primetime yet. With the cancellation of 2MB blocks, it became obvious that there would be no quick fix to the currency’s scaling problem.

Waves of good news

 

However,  Bitcoin Cash began rapidly dropping from its nearly vertical price ascent, miners came back to Bitcoin, and the transaction backlog subsided. Bitcoin’s price began to rise, and as good news arrived, the price moves became even larger.

 

What good news? Well, the  British hedge fund Man Group, with over $100 bln in funds under management, announced they will begin trading Bitcoin once  CME’s futures market is launched. Immediately following this, Payments app Square announced its full integration of Bitcoin into the payments platform.

 

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